VINCENT L. BRODERICK, U.S.D.J.
These cases, involving suits against a large number of firms allegedly involved directly or indirectly in various stages of asbestos mining, manufacturing or distribution, are before me on a Report and Recommendation of United States Magistrate Judge Kathleen A. Roberts dated December 9, 1992 recommending the grant of summary judgment to the moving defendants. The products of the defendants in these cases have not been specifically traced to plaintiffs' premises.
For the reasons bet forth by the Magistrate Judge and the further reasons which follow, I approve and adopt her Report and Recommendation, overrule plaintiffs' objections to it, and grant summary judgment dismissing the complaint as to the moving defendants.
The full caption of these cases is set forth as Appendix A to this memorandum order.
Plaintiffs are directed to show cause within 30 days of the date of this memorandum order why this case should not be dismissed as to the remaining defendants.
Plaintiffs have failed to show that any specific moving defendants were responsible for asbestos reaching their premises. Instead, they argue that such specific identification is difficult or impossible, and that the possibility that these defendants were responsible, together with their participation in varying aspects of asbestos mining, manufacturing, or distribution, is sufficient to support this lawsuit. In support of this contention, plaintiffs urge various approaches to determining so-called "alternative liability," based on market share, participation in illegal activities, concerted action, conspiracy, and/or contributory causation of harm. These contentions are discussed in detail in Magistrate Judge Roberts' Report and Recommendation at 40-55. I need not repeat her analysis; I incorporate her Report and Recommendation and make it part of this memorandum order.
Plaintiffs' objections to Judge Roberts' Report and Recommendation rely in part on Hymowitz v. Eli Lilly & Co., 73 N.Y.2d 487, 541 N.Y.S.2d 941, 539 N.E.2d 1069 (1989), cert. denied 110 S. Ct. 350 (1989). In that case the New York Court of Appeals indicated that while "it may be fair to employ alternative liability in cases involving only a small number of potential wrongdoers, that fairness disappears with the decreasing probability that any one of the defendants actually caused the injury."
Given the number of entities involved in one or another aspect of the asbestos industry, all of whom might be liable according to plaintiffs' theory, Hymowitz would support adoption of Judge Roberts' recommendation to dismiss the case.
Plaintiffs also rely on In re Agent Orange Product Liability Litigation, 597 F. Supp. 740, 823 (E.D.N.Y. 1984) which concerned the herbicide Agent Orange, but which mentioned asbestos cases as potentially suitable for allocation of percentages of harm caused by industry members. As pointed out by Judge Roberts in her Report and Recommendation at 40-43, market share liability has been rejected in all asbestos cases to date for numerous practical reasons, including the fact that asbestos is not a unitary product with identical content, as is DES or Agent Orange.
Even more important may be that those in the manufacturing and distribution phases of the pharmaceutical and insecticide industries can be held to knowledge of the precautions required in connection with their products. Through its regulatory requirements, Congress has made it clear to manufacturers and distributors in such industries that they are responsible for careful treatment of their wares. See United States v. Generix Drug Corp., 460 U.S. 453, 75 L. Ed. 2d 198, 103 S. Ct. 1298 (1983). Where controlled items are involved, adverse inferences supporting liability can be drawn from irresponsible behavior. Direct Sales Co. v. United States, 319 U.S. 703, 87 L. Ed. 1674, 63 S. Ct. 1265 (1943). Where, as here, however, there is no showing that those sought to be held liable had reason to regard the product involved as a staple with particular hazards, such inferences are inappropriate. United States v. Falcone, 109 F.2d 579 (2d Cir.), aff'd 311 U.S. 205, 85 L. Ed. 128, 61 S. Ct. 204 (1940).
Plaintiffs have not argued that during the periods when it was placed in their buildings, asbestos was generally known to be a hazardous item. There is no indication that asbestos was generally recognized by defendants here or by the public at the time involved as an item which carried risks calling for further inquiry or special caution.
Plaintiffs claim, however, that some members of the asbestos industry knew of risks connected with asbestos and acted to suppress information with respect to that knowledge during a period from the 1930s into the 1950s. They base that claim largely on B. Castleman, Asbestos: Medical and Legal Aspects 681-88 and documentary appendix at 263-270. In Solow v. W.R. Grace & Co., Index No 2453/88, Sup Ct. N.Y. Co., 7/1/89, 1090 NY Misc LEXIS, Justice Harold Baer, Jr.
recognized that conspiratorial efforts to suppress knowledge of risks concerning a product could be actionable, but dismissed the complaint because of absence of specific allegations that the named defendant in that case was involved in the alleged conspiracy.
The New York Court of Appeals has endorsed a market share approach as to one defendant in a DES case involving failure to test a product; the court's rationale was that overlooking the failure to test a powerful pharmaceutical product would encourage other companies to act imprudently or improperly. Bichler v. Eli Lilly & Co., 55 N.Y.2d 571, 450 N.Y.S.2d 776, 436 N.E.2d 182 (1982).
Dissemination of asbestos at a time when industry members should have realized that asbestos posed hazards is specifically claimed by plaintiffs in this case only in regard to U.S. Gypsum, based on exhibits cited in plaintiff's objections at 7, footnote 7. Those exhibits, derived from Castleman's study, do not appear to mention Gypsum by name, although entities mentioned in them may have been affiliated with Gypsum in ways not traceable from the materials cited by plaintiffs in their objections to Judge Roberts' recommendations.
Cognizable under Solow and Bichler would be a claim for damages traceable to deliberate concealment by a defendant member of an industry; also cognizable would be a claim against an industry member that downstream injury, directly administered by another party, was triggered by concealment by the industry member of serious risks concerning a product, contributing to harm to the plaintiffs. See also Nicolet v. Nutt, 525 A.2d 146 (Del. 1987). In an industry in which it is foreseeable that one actor can and will rely on what has been learned by others about hazards,
deafening silence where an alarum would be required or expected can be highly misleading.
But on the present motion for summary judgment, no specific evidence has been shown sufficient to create a genuine issue of material fact with respect to liability on the part of the particular defendants sued. It was the duty of plaintiffs to make such a showing or to indicate specifically what further discovery might enable them to make it, if they were to survive defendants' motions. Celotex Corp. v. Catrett, 477 U.S. 317, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986).
As outlined in Judge Roberts' careful analysis in her Report and Recommendation, authority does not favor permitting lawsuits to proceed against parties without traceable responsibility where there is no evidence of specific deliberate wrongdoing on their part, and where the product involved was not generally known as hazardous at the time of their possible involvement. Courts, however, can and do confront new dilemmas with innovative remedies where the need for those remedies flows from, rather than contradicts, prior principle. In concluding that this is not a case calling for extension of legal liability to the outer limits - an extension which would be necessary to sustain plaintiffs' position - I am mindful that this leaves building owners without recourse to the asbestos industry for harm caused by the product where the source of asbestos in the buildings cannot be traced.
But imposing costs on those who may not have caused the harm is problematic. And to impose monetary costs on parties acting in good faith who had no reason to believe that their product was hazardous or defective, and who were not negligent, would have a chilling effect on legitimate activity with enormous costs and risks to the public. The extension of legal liability beyond fault to behavior which causes damage has long been accepted in various contexts as part of the cost of doing business. Where, however, an extension of the reach of lawsuits is urged which may result in enormous exposure to those who have had no warning,
the question of whether there should be an extension must be approached with care.
Thus in some situations legislative remedies have been crafted which do not involve conventional suits for damages, as in the case of the National Childhood Vaccine Injury Act, 42 USC § 300aa; see Hagan, Vaccine Compensation Schemes, 45 Food Drug Cosm. L.J. 477 (Sept. 1990); Dobreff, National Vaccine Compensation Act, 69 Mich. B.J. 806 (1990); see also Pub Law No 97-395, 96 Stat. 2001 (1982) (relating to children's sleepwear).
While it is the function of the legislative and executive branches of government to determine what alternate approaches may be adopted, the fact that alternatives to lawsuits are possible is relevant, and suggests that courts should hesitate to strain traditional concepts to encompass problems at the limits of their reach.
As is obvious from Judge Roberts' report, considerable factfinding has already taken place concerning the possible connection of each defendant to the plaintiffs' buildings. Plaintiffs assert in general terms that additional discovery concerning the asbestos industry is needed, but they fail to specify what such discovery would show that would avoid the conclusions reached by Judge Roberts. Under Fed.R.Civ.P. 56(f), this is insufficient to avoid summary judgment. Specific depositions or documentation have not been pinpointed which might uncover concealment by named defendants of risks from asbestos. See Burlington Coat Factory Warehouse Corp. v. Esprit De Corp., 769 F.2d 919 (2d Cir. 1985); Contemporary Mission, Inc. v. USPS, 648 F.2d 97 (2d Cir. 1991).
Plaintiffs' chronology of alleged concealment of asbestos risks is also troublesome. The Castleman book, the only source cited by plaintiffs even indirectly in their objections to Judge Roberts' Report and Recommendation, is only quoted in regard to events more than 30 years ago. While limitations are tolled by concealment, at some point events are so far back that historical factfinding becomes extremely difficult,
especially under constraints imposed by the Federal Rules of Evidence where legal liability is alleged. Moreover, damage awards would not draw upon the assets of actual wrongdoers, but only on those of persons with little if any connection to the events involved While in some cases legal redress for long-past wrongs has been authorized, such redress is recognized as problematic and is understandably controversial within the legal system.
A yawning gap exists in plaintiffs' assertions as to the period since 1960, and no specific discovery has been identified which is designed to fill that gap. While open-ended exploration of past events is important historically, it can be pursued under the federal discovery rules with their inherent costs and limitations only upon a clear showing of need and of a reasonable likelihood that the exploration will lead to admissible evidence, a showing absent here.
The boundaries between appropriate judicial and legislative investigations would become blurred if the owner of any building containing asbestos could examine any person or entity having anything to do with the entire asbestos industry concerning any communications or conduct related to a family of products containing asbestos. To permit such examination would raise questions of standing, as with federal taxpayer suits disallowed as a general matter in Frothingham v. Mellon, 262 U.S. 447, 67 L. Ed. 1078, 43 S. Ct. 597 (1923). I reject the invitation to permit such examination absent preliminary proof of wrongdoing which would guide into definable channels such an open-ended inquiry. To permit an open-ended inquiry of this nature would initiate an open-ended litigation with no foreseeable limits as to parties, longevity, or what discovery would be authorized. I do not interpret Fed.R.Civ.P. 26 as contemplating such a result on the facts shown here.
Morgan, Lewis & Bockius, as the defense counsel listed at the top of the service list of defense counsel, is directed to furnish copies of this memorandum order to all other counsel, apart from plaintiffs' counsel.
Since the adoption of Judge Roberts' Report and Recommendation does not dispose of the entire case, and no finding under Fed.R.Civ.P. 54(b) has been made, the clerk will not enter final judgment at this time nor close this case for administrative purposes.
Dated: White Plains, New York
March 31, 1993
VINCENT S. BRODERICK, U.S.D.J.
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK
210 EAST 86TH STREET CORP., Plaintiff, -against- COMBUSTION ENGINEERING, INC., et al., Defendants. PARK COMCAR ASSOCIATES, et al., Plaintiffs, -against- COMBUSTION ENGINEERING, INC., et al., Defendants.
87 Civ. 6497 (VLB), 87 Civ. 6498 (VLB)
REPORT AND RECOMMENDATION
TO THE HONORABLE VINCENT L. BRODERICK:
These are actions for actual, exemplary and punitive damages based on the existence of asbestos-containing products in buildings owned by plaintiffs, who bring these actions under various theories of liability including negligence; fraud; intentional tort; breach of warranty; market share liability; enterprise liability; concert of action liability; alternative liability; concurrent cause liability; and civil conspiracy. Presently pending before the court is a joint motion for summary judgment by sixteen defendants,
as well as the individual motion of defendant W. R. Grace & Co., pursuant to Rule 56 of the Federal Rules of Civil Procedure and paragraph 8 of this Court's Pretrial Order No. 2, dated May 26, 1988. Briefly stated, the moving defendants contend that plaintiffs cannot prove that their buildings contain any asbestos product manufactured, sold or installed by the moving defendants and that in the absence of such proof they are entitled to judgment dismissing the complaints as a matter of law. For the reasons set forth below, I recommend that defendants' motions be granted.
Plaintiffs commenced these actions in the Supreme Court of the State of New York in July 1987, alleging that the presence of certain asbestos-containing products in buildings in their ownership, custody or control poses a risk to building occupants for which defendants should be held liable. The state court actions named more than 50 defendants which, plaintiffs allege, have engaged, directly or indirectly, in the mining and processing of raw asbestos fiber, or in the manufacturing sale or installation of asbestos-containing products.
On September 8, 1987, defendant Asbestos Corporation Limited filed a petition for Removal from the New York State Supreme Court to the United States District Court in the Southern District of New York on the basis of diversity jurisdiction, 28 U.S.C. § 1441(d). The actions against 40 defendants were subsequently removed to this court and assigned to your Honor.
By order dated January 8, 1988, these actions were referred to me to supervise discovery and to prepare a Report and Recommendation on all substantive motions.
There are ten plaintiffs in these actions, all New York corporations or partnerships. Each has at least one building in Manhattan in its ownership, custody or control. The plaintiffs are as follows:
(1) Plaintiff 210 East 86th Street Corporation is the owner of a building located at 210 East 86th Street.
(2) Plaintiff Park Comcar Associates is the owner of a building located at One Park Avenue.
(3) Plaintiff 11 Park Place Associates is the owner of buildings located at 11 Park Place and 25 Park Place.
(4) Plaintiff Broadway West Street Associates is the owner of buildings located at 21 West Street and 71 Broadway.
(5) Plaintiff Hudson Telegraph Associates is owner of a building located at 60 Hudson Street.
(6) Plaintiff Madison 28 Associates is the owner of a building located at 79 Madison Avenue.
(7) Plaintiff Plaza Madison Associates is the owner of a building located at 655 Madison Avenue.
(8) Plaintiff Belmont Madison Associates is the owner of a building located at 183 Madison Avenue.
(9) Plaintiff Gramercy 5 Associates is the owner of a building located at 120 East 23rd Street.
(10) Plaintiff 633 Third Associates is the owner of a building located at 633 Third Avenue.
Plaintiffs have sued the following 40 defendants,
all of which are foreign corporations that allegedly conduct or have conducted business in the State of New York:
(1) Combustion Engineering, Inc.;*
(2) W.R. Grace & Co.;*
(3) Certaineed Corporation;
(4) United States Gypsum Company;*
(5) National Gypsum Company;*
(6) United States Mineral Products Company;*
(7) Charles Pfizer & Company, Inc.;
(8) Georgia-Pacific Corporation;*
(9) Proko Industries, Inc.;*
(10) The Flintkote Company;*
(11) C. Tennant & Sons;
(12) Aaer Sprayed Insulations, Inc., a division of Rogers Insulating & Roofing Company, Inc.;
(13) Air-O-Therm Application Co., Inc.;
(14) Wilkins Insulation Company;
(15) Forty-Eight Insulations, Inc.;
(16) Lake Asbestos of Quebec, Ltd.,* also known as Lac D'Amiante Du Quebec, Ltee.;
(17) J.W Roberts, Ltd.;*
(18) Cape Asbestos;
(19) Asbestos Corporation Limited;*
(20) Carey Canada Inc.;*
(21) Brinco Mining, Ltd.,* formerly known as Cassiar Resources, Ltd.;
(22) Turner Asbestos Fibres, Ltd.;*
(23) Asbestospray Corporation;*
(24) Spraycraft Corporation,* individually and as successor to Asbestospray Corporation and Asbestos Products Manufacturing Corporation;
(25) Asbestos Products Manufacturing Corporation; *
(26) Atlantic Asbestos;
(27) York Insulation;
(28) MBC Corp.,
successor to Matthew Ballick;
(29) King Insulation;
(30) Asbestos Construction;
(31) Magnesia Asbestos;
(32) ABCO Insulation;
(35) Insulation Materials Corporation;
(36) Richmond Asbestos;
(37) ACandS, Inc.;*
(38) Garlock, Inc.;
(39) Rock Wool Manufacturing Company;
(40) Standard Asbestos Manufacturing and Insulating Company.
At the outset of this litigation, plaintiffs had no evidence to show that the asbestos-containing products in their buildings were manufactured, sold or installed by any of the defendants. Furthermore, plaintiffs had no basis for naming any particular defendant in this action other than plaintiffs' belief that each of the named defendants manufactured, sold or installed asbestos-containing products at the time of the construction or renovation of their buildings. Transcript of pretrial conference held on July 18, 1988, at 5.
Accordingly, in Pretrial Order No. 2, the Court established a procedure to determine whether any of defendants in fact manufactured, sold, or installed the asbestos-containing products found in plaintiffs' buildings. The procedure may be summarized as follows:
(1) Plaintiffs were required to produce to defendants a list, on a building-by-building basis, describing in detail the products at issue, including the date each identified product was installed or applied;
(2) Sixty days after the receipt of plaintiffs' list, each defendant was required to serve plaintiffs with lists of the constituents of each of its named products or the described products manufactured by defendants and sold in the United States during the time period included on plaintiffs' list for such products, excluding the percentages of the constituent substances of the products (the "Constituent Lists"). The Constituent Lists did not identify the manufacturer or product name of the product for which a list was submitted;
(3) Simultaneously, defendants filed the Constituent Lists with the court under seal, together with complete product formulas, including constituent substances and percentages of the whole by weight or volume, for each product on the Constituent Lists (the "Product Formulas");